Engineer letter raises issues about Yampa Valley Electric Association
June 21, 2017
If you go
YVEA is holding its annual member meeting at 3:30 p.m. Thursday at the new headquarters in Steamboat Springs, 2211 Elk River Road, following a member appreciation lunch at 11:30 a.m. Three of nine board seats are up for re-election, though only one seat is contested.
Yampa Valley Electric Association has seen a lot of changes since CEO Diane Johnson took the helm nearly four years ago, and whether those changes are good or bad depends on whom you ask.
From technology upgrades to changes in employee pay, benefits and culture, the transition has fomented discontent among numerous former employees. Some of their complaints found voice in a letter sent to YVEA staff and board of directors by outgoing engineering supervisor Jason Hall in early June.
“When I took my licensing test, there’s a big part in there that I need to do what’s in the public’s best interest,” Hall said in an interview with the Daily Press. “And there’s a lot of stuff happening that I don’t feel is in the public’s best interest.”
But Johnson sees the upset as a natural consequence of modernizing the company and making the business decisions necessary to steer the company into the future, a prerogative assigned her by the board, and calls the allegations set forth in the letter "false."
“It’s not unique for a new leader to be asked to come in, especially to make pretty significant changes across the board, from technology to personnel to benefits compensation and (also to) build a new building,” Johnson said. “You put that all together, and you’re going to have kind of a perfect storm, especially for employees who think things are moving too fast.”
“Taj Mahal” or prudent investment?
One allegation raised by Hall — and echoed in concerns voiced by Craig residents, including Craig Mayor John Ponikvar — is that YVEA is spending too much on renovating its new headquarters, especially in light of impending rate hikes.
“The price tag for YVEA’s corporate building upgrade was so expensive that I believe projects have been removed from our work plan to fund the new headquarters,” Hall said in the letter, referring to the building as a “Taj Mahal.”
The price tag, according to YVEA’s audited 2016 financials, is a little more than $8.1 million in outstanding construction contracts on the headquarter remodel. YVEA purchased the former TIC campus in Steamboat Springs in July of 2014 for $9.7 million.
But Johnson defended the purchase and upgrades as prudent, and also an act of community stewardship, since some Steamboat residents were worried the large industrial property might sit vacant. Johnson and the board also determined it was less expensive to buy the existing building complex than to build from scratch.
“It is not a Taj Mahal in any way, it is a functional building… it’s not a luxury building at all,” Johnson said at a community meeting in Craig in early June. “I know we’re building that as economically as we can.”
YVEA will make a net profit of more than $5 million on several properties recently sold or under contract, Johnson said, including the old building in downtown Steamboat, a parking lot and two properties that had been purchased before her tenure as possible build sites. That $5 million will offset the cost of the new building, and the remainder will be paid for over the course of 50 years, Johnson said.
About 20 of roughly 85 system improvement projects that were slated for the 2015 to 2017 period were delayed until 2018 to 2020, according to a working document provided by Hall. But Johnson said the reshuffling was not due to money being siphoned off for headquarter building costs, but to a department budgeting oversight.
“There was a work plan that was submitted by Jason and his manager, (amounting to) about $3.2 million,” Johnson said.
But about $1.5 million in invoices for 2016 projects would be paid in 2017, which the department hadn’t accounted for, she said, adding, “there’s absolutely no connection to (the delayed projects) and the building.”
Regarding the rate hikes that take effect in July, Johnson said the headquarter building “is having very little impact on the rate increase.”
"Toxic environment" or growing pains?
The YVEA board will meet Thursday morning, including in an executive session with management personnel to discuss Hall’s letter in depth, said Board Chair Dean Brosious, who represents part of Craig and Moffat County. The board is currently drafting a formal response to the letter.
“We plan as a board to go through that letter basically line by line and address and/or have management respond to all the questions that were raised,” Brosious said.
Brosious recognized the angst amongst many employees caused by changes to retirement benefits and new pay-for-performance standards, leading employees to seek unionization after nearly 20 years without union representation.
In his letter, Hall described a “toxic work environment,” which he blamed on Johnson. Several former employees expressed similar complaints in interviews with the Daily Press on the condition of anonymity.
But Johnson inherited low morale from the previous management, she said, and with all the changes she’s been charged with making, it will take time for employees to adjust.
“Change and change management is probably the hardest thing any leader decides to do and it doesn’t happen quickly. And we’re probably in the heart of that time when everything feels out of control, and we’ll be there before it settles back down,” she said. “It takes a while before people feel comfortable again.”
Brosious believes those complaints should be listened to, but stands behind the course the board and management are charting for YVEA.
“The bottom line is it’s not nearly as broken as Jason thinks it is and not nearly as perfect as we’d like it to be, but somewhere in between,” he said.
YVEA is holding its annual member meeting at 3:30 p.m. Thursday at the new headquarters in Steamboat Springs following a member appreciation lunch at 11:30 a.m. Three of nine board seats are up for re-election, though only one seat is contested.
Contact Lauren Blair at 970-875-1795 and follow her on Twitter @LaurenBNews.